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LETTERS 


HONOURABLE  LEVI  WOODBURY, 


SECRETARY  OF  THE  TREASURY 


NITED    STATES. 


N  E  W- Y  0  li  K  ; 

I..    IS.    (   I.AVI'ON.    I'KIN'I'llli     AM)    ST  \Tlo\KU. 

1837. 


LETTERS 


HONOURABLE    LEVI    WOODBURY, 


SECRETARY  OF  THE  TREASURE 


UNITED    STATES. 


I 


V       ~ 


NEW-YORK: 
E.   B.   CLAYTON,   PRINTER  AND   STATIONER, 

No.   59  WALL-STREJT. 

1837. 


UBRAk'Y 


LETTER  I. 

To  the  Hon.  Levi  Woodlury,  Secretary  of  the  Treasury  of  the 
United  States. 


SIR: — The  subversion  of  the  business  and  currency  of  the 
United  States,  has  become  a  subject  of  deep  concern,  as 
well  as  extensive  suffering.  To  you,  as  presiding  over  the 
financial  duties  of  the  administration,  it  presents  more  weighty 
cares  than  have  ever  before  occupied  the  consideration  of 
the  Department.  Had  the  catastrophe  resulted  from  any  of 
the  causes  by  which  nations  have  been  overthrown,  the 
strength  of  man  withered,  or  his  wisdom  baffled — had  war, 
famine,  or  pestilence  been  its  origin — we  might  foster  the 
hope  of  better  days  when  those  evils  should  cease  to  afflict 
us.  But  in  a  time  of  profound  and  continued  peace,  unin- 
terrupted for  more  than  twenty  years;  when  health,  with 
little  exception,  has  been  universal ;  when  the  earth  has  yield- 
ed its  abundance ;  when  industry  and  enterprise,  in  every  de- 
partment, stimulated  by  the  richest  rewards  to  unexampled 
efforts,  were  putting  forth  all  their  powers ;  when  the  national 
debt  was  paid,  and  our  only  fiscal  embarrassments  arose 
from  excess  of  revenue ;  when  wealth  seemed  to  pour  spon- 
taneously into  the  coffers  of  every  individual;  what  appeared 


20O3514 


like  a  spell  of  enchantment  suddenly  paralysed  the  nation, 
and  overwhelmed  both  government  and  people  with  bank- 
ruptcy. Utter  death  has  come  over  the  business  and  cur- 
rency, and  all  confidence  is  annihilated.  The  prostration  is 
so  entire,  as  to  leave  no  hope  but  by  such  an  extraordinary 
application,  as  will  at  once  impart  new  life  to  the  dead  mass, 
and  control  those  causes  of  dissolution,  which,  if  left  unre- 
strained, would  again  prove  too  powerful  for  even  the  best 
established  system  to  sustain.  In  this  appalling  state  of  the 
country,  sir,  I  take  the  liberty  to  suggest  some  considerations 
on  its  causes,  and  the  remedies  which  may  minister  relief. 

Just  anterior  to  the  prostration  of  business,  our  manufac- 
tures and  commerce  were  greatly  extended,  and  conducted 
mainly  upon  credit.  Individuals  and  companies,  with  little 
or  no  capital,  were  often  found  to  employ  tens  and  hundreds 
of  thousands.  These  borrowed  means  were  supplied  by  the 
immense  amount  of  paper  currency  furnished  by  the  banks, 
which  had  been  established  in  all  parts  of  the  United  States. 
The  banks  on  the  one  hand  and  men  of  business  on  the  other, 
considered  it  for  their  respective  interests  to  employ  the 
greatest  possible  amount  of  paper  money.  As  the  profits  of 
the  banks  were  proportional  to  their  discounts,  and  these 
were  done  by  the  issuing  of  paper,  it  is  very  obvious,  that 
there  would  be  a  constant  tendency  to  excess.  This  would 
be  restrained  by  nothing  but  the  necessity  of  redemption. 
But  unless  an  adverse  balance  of  trade,  requiring  remittances 
to  foreign  countries,  or  some  other  exigency  out  of  the  ordinary 
course  of  domestic  business,  should  create  a  demand  for 
specie,  none  would  be  exacted.  Paper,  being  the  more  conve- 
nient currency,  would  be  preferred  in  the  common  exchanges 
of  trade,  and  the  gold  and  silver  would  repose  in  the  banks. 
During  such  a  period  no  redemptions  are  necessary,  and 
emissions  maybe  unlimited,  but  for  the  fear  of  its  termination. 
Men  of  business  who  expect  emoluments  proportioned  to  the 
number  and  amount  of  their  operations,  stand  ready  to  gratify 


the  cupidity  of  the  bankers,  and  employ  all  the  paper 
which  they  can  persuade  them  to  issue.  Experience  has 
ever  shown,  that  there  is  no  foresight,  either  in  those  who 
manage  moneyed  institutions,  or  in  those  whose  extravagance 
they  stimulate  and  sustain,  sufficient  to  restrain  the  most 
ruinous  excesses.  An  increasing  currency  occasions  in- 
creasing prices.  These  react  upon  the  spirit  of  trade  and 
manufactures,  and  by  their  mutual  influence,  engender  the 
utmost  excesses.  A  circulating  medium  on  a  par  with  specie, 
and  which  costs  nothing  but  the  work  of  the  engraver,  is  a 
manufacture  too  precious  to  be  monopolized  by  a,  few  moneyed 
institutions ;  and  the  legislatures  of  the  several  States  must  be 
plied  with  continual  memorials  for  acts  of  incorporation. 
Thus  banks  become  multiplied,  their  competitions  sharpened, 
prices  raised,  overtrading  and  speculation  cherished,  and 
imaginary  fortunes  acquired  ;  and  the  necessary  consequen- 
ces of  this  factitious  and  unnatural  state  of  society  must  soon 
be  expected  to  follow.  But  no  artificial  state  of  the  currency 
can  be  long  preserved.  The  quantity  of  the  circulating  me- 
dium of  any  country,  while  its  general  standard  value  is  pre- 
served, cannot  be  permanently  augmented  beyond  the  natural 
quantity  allotted  by  the  laws  of  trade,  nor  can  its  value  be 
increased  by  any  artificial  expedients.  No  attempts  to  ac- 
complish either  have  ever  been  successful,  even  when  made 
by  the  most  despotic  monarchs.  All  laws  relative  to  tender, 
or  prohibiting  exportation,  or  adulterating  coin  by  a  mixture 
of  the  baser  metals,  or  augmenting  the  whole  mass  by  a  con- 
vertible paper  currency,  have  proved  utterly  impotent.  The 
last  expedient — that  of  convertible  paper  money — will  in- 
crease the  relative  value  of  the  currency  for  a  little  while, 
until  it  finds  its  level  in  the  market.  This  renders  it  more 
mischievous  than  if  its  decline  were  instantaneous ;  for,  as 
there  must  be  a  change  of  prices,  in  the  progress  of  its  de- 
preciation, without  any  change  of  values,  all  contracts  fixing 
on  a  stipulated  sum  to  be  paid  at  a  future  period,  must  ope- 


rate  to  the  injury  of  one  of  the  parties.  If  the  seller  should 
insist  on  payment  in  specie,  he  will  sustain  the  same  loss  as 
if  he  received  paper,  for  the  depreciation  extends  equally 
to  both,  so  long  as  the  banks  redeem  their  issues.  If  the 
increase  of  the  currency  has  raised  the  price  of  commodities 
twenty-five  per  cent.,  between  the  time  of  the  making  and  the 
maturity  of  the  contract,  that  proportion  will  be  the  measure 
of  his  loss,  as  the  money  has  lost  so  much  of  its  value.  All 
who  have  fixed  revenues  from  past  investments — all  who 
depend  on  stated  salaries — as  the  officers  of  government  and 
others — and,  in  short,  all  who  receive  money  on  past  contracts, 
must  suffer  in  proportion  to  the  change  it  has  undergone  in 
the  intermediate  period.  But  the  value  of  money  must  be, 
and  will  be  inversely  as  its  quantity.  It  has  been  well  re- 
marked by  some  sound  political  economists,  that  if  every 
man's  money  throughout  the  world  were  doubled  in  one 
night,  by  a  miracle,  the  mass  would  be  worth  no  more.  The 
only  effect  would  be,  that  two  dollars  would  be  necessary, 
afterwards,  to  do  the  office  which  one  performed  before.  He 
who  previously  carried  one  dollar  to  market  to  buy  a  bushel 
of  wheat,  must  afterwards,  other  things  remaining  the  same, 
carry  two  for  the  same  purpose.  Would  such  an  increase 
be  of  any  use  ?  The  precious  metals  derive  their  value  from 
their  scarcity.  A  quantity  sufficient  for  an  adequate  subdi- 
vision, has  all  the  value,  and  all  the  usefulness,  of  any  greater 
amount.  Beyond  this,  the  amount  of  currency  in  the  world 
adds  nothing  to  its  value,  and  does  but  increase  its  burden 
and  inconvenience.  Silver  is  more  plenty  than  gold,  and  for 
this  reason  its  value  is  less  and  its  inconvenience  greater. 
Were  silver  annihilated,  the  value  of  the  currency  would  not 
be  diminished,  for  gold  would  assume  the  entire  value  of 
both;  although  its  quantity  might  not  be\  sufficient  for  the  re- 
quisite subdivisions  for  small  change. 

The  remarks  which  we  often  see  in  the  public  addresses, 
and  in  newspapers  abroad  and  at  home,  that  the  quantity 


of  specie  in  the  world  is  not  sufficient  to  perform  the  ex. 
changes  of  trade,  and  needs,  for  that  reason,  the  addition 
of  paper,  is  adverse  to  well  established  principles,  which 
are  confirmed  by  the  experience  of  every  age  and  nation. 

Perhaps  the  language  here  adopted,  that  the  prices  of 
commodities  are  raised  or  depressed  by  the  greater  or  less 
amount  of  the  circulating  medium,  is  not  as  strictly  accurate, 
as  to  say,  that  the  value  of  the  money  itself  is  varied  from 
that  cause.  All  which  is  meant  is,  that  money,  like  mer- 
chandise, is  subject  to  that  great  law  of  the  market,  by 
which  the  price  of  any  thing  depends  on  the  demand  and 
supply.  In  the  case  above  supposed,  of  doubling  the  whole 
amount  of  money  in  one  day,  it  is  the  value  of  the  money 
only,  and  not  the  value  of  commodities,  which  is  affected. 
The  supply  and  demand  of  wheat  will  remain  the  same  as 
before ;  but  its  price  is  raised,  because  the  supply  of  money 
in  proportion  to  the  demand  for  it,  is  increased,  and  thereby 
the  value  of  each  dollar  is  lessened.  If  such  increase  in  the 
mass  of  money  takes  place  in  one  market  only,  each  dollar 
will  be  of  less  value  there,  than  in  others,  where  no  such 
change  has  occurred;  and  by  the  laws  of  trade,  the  currency 
will  flow  into  that  market  where  it  is  more  scarce,  and  there- 
fore more  valuable.  If  wheat  has  the  same  price  in  Russia 
and  the  United  States,  and  by  a  sudden  increase  of  the 
currency,  its  price  is  doubled  here,  the  merchant  who  sends 
his  money  to  Russia  and  imports  wheat  to  this  country,  will 
make  a  great  profit  in  the  operation.  In  this  manner  money 
will  become  equalized,  by  an  exportation  of  that  portion  of  it 
which  is  current  abroad,  as  certainly  as  a  heavy  body  will 
fall  to  the  earth  by  the  force  of  gravitation.  As  money  is 
unlike  any  other  article,  in  that  it  is  the  common  measure  of 
value,  and  gives  the  nominal  price  to  all  commodities,  we 
speak  of  the  rise  and  fall  of  these  commodities,  when  the  rise 
and  fall  of  money  only  is  intended.  Other  articles  rise  and 
fall  in  the  same  manner  as  money  by  changes  in  their  intrin- 


8 

sic  value,  by  reason  of  the  relative  demand  and  supply. 
Hence,  the  vacillations  in  the  market  price  of  cotton,  or  any 
other  commodity,  may  occur,  independently  of  any  change 
in  the  value  of  money.  This  may  cause  an  exportation  of 
specie  to  meet  the  demand  of  creditors  abroad.  But  no  con- 
vulsion in  the  currency  can  result  from  it,  if  the  natural  amount 
of  money  has  not  been  increased,  by  the  issue  of  paper,  as 
will  be  more  fully  explained  hereafter.  Changes  may,  and 
will  continually  occur,  in  the  prices  of  each  article  of  mer- 
chandise, from  a  change  in  its  intrinsic  value ;  but  those 
resulting  from  money  are  general,  and  affect  every  commodity 
alike. 

Therefore,  an  amount  of  money  in  this  country,  above  its 
portion  allotted  by  the  laws  of  trade,  cannot  be  long  preserved. 
The  rise  of  prices  is  the  inevitable  consequence.  As  soon  as 
this  is  found,  by  a  comparison  with  foreign  markets,  impor- 
tations will  take  place  from  abroad.  This  will  create  a 
balance  against  the  country,  which  must  be  settled  by  that 
portion  of  the  mixed  currency  which  will  circulate  abroad. 
Thus,  specie  will  begin  to  flow  from  the  United  States  to 
Europe.  This  movement  will  hardly  be  perceived  at  first, 
in  its  influence  on  our  domestic  operations ;  but  the  loss  of 
every  successive  million,  which  leaves  our  shores,  will  be 
more  heavily  felt  than  the  last.  Whether  banks  have  forty 
or  thirty  per  cent,  of  specie,  in  proportion  to  their  circulation, 
is  of  little  moment,  if  they  can  still  meet  their  redemption, 
without  embarrassment.  But  the  gradual  exhaustion  will 
soon  reach  a  point  which  will  compel  them  to  contract  their 
discounts.  When  this  is  done,  especially  after  such  an 
enormous  expansion  of  business  and  currency  as  we  have  just 
experienced,  the  shock  pervades  the  country.  The  present 
crisis  was  unexpected,  mercantile  sagacity  had  overlooked  the 
laws  of  trade,  which  are  grounded  on  the  laws  of  nature,  and 
had  embarked,  with  reckless  confidence,  on  the  ocean  of  a 
baseless  credit.  But  they  soon  began  to  feel  its  ebb.  For 


9 

some  time  prior  to  the  suspension  of  business,  as  the  banks 
found  themselves  unable  to  meet  the  growing  demands  of  the 
country  by  mearis  which  were  daily  diminishing,  their  de- 
pendants, to  sustain  a  credit  now  in  peril,  and  clinging  with 
the  grasp  of  death  to  the  enterprises  in  which  they  had  em- 
barked, were  found  in  the  shops  of  usurers,  borrowing  money 
on  the  sale  of  notes  at  from  one  and  a  half  to  five  per  cent,  a 
month.  Under  this  lash,  the  merchant,  manufacturer,  and 
speculator  began  to  sink — the  crisis  came — they  were  com- 
pelled to  stop — the  banks  soon  followed  their  example,  and 
the  whole  country  is  now  in  ruins. 

Whenever  the  foreign  debt  is  extinct,  partly  by  remittance 
and  partly  by  bankruptcy,  so  that  the  exportation  of  specie 
will  cease,  the  banks  may  recover  and  business  recommence ; 
for  there  is  no  difficulty  in  sustaining  an  unlimited  paper 
circulation,  during  that  state  of  the  country  which  renders 
redemption  unnecessary.  The  same  train  of  causes  and  effects 
will  then  again  commence,  and  result  in  the  same  catastrophe. 
As  the  quantity  of  money,  augmented  by  the  paper  issues, 
while  they  are  convertible,  cannot  be  permanently  increased, 
nor  any  thing  added  to  its  natural  value,  prices  will  again 
rise — importations  of  goods — exportations  of  specie — the  con- 
sequent disability  of  banks— embarrassment  of  their  debtors 
— suspension  of  specie  payments  and  general  insolvency — 
will  again  fill  the  country  with  high  hopes  and  broken  hearts 
in  regular  succession,  and  deepen  the  corruption  of  morals 
which  extravagance,  speculation,  and  luxury,  followed  by 
disappointment  and  despair,  never  fail  to  produce. 

From  these  facts  and  considerations,  it  is  clear,  that  the 
present  state  of  the  country  is  the  effect  of  a  fluctuating  cur- 
rency, occasioned  by  the  vacillations  and  excesses  which 
must  inevitably  result  from  an  unregulated  system  of  banking. 
From  1792,  when  we  had  only  eleven  banks,  with  an  au- 
thorized capital  of  eighteen  millions,  until  the  present  year, 
when  their  number,  including  branches,  is  about  800,  with 


10 

an  authorized  capital  of  near  four  hundred  millions,  they  have 
been  constantly,  but  not  uniformly,  increasing.  As  the  money 
market  has  been  affected  by  the  state  of  the  country,  their 
increase  has  been  accelerated  or  retarded,  but  never  prevent- 
ed. Their  effects,  although  less  severe,  have  been  the  same 
in  their  essential  characteristics,  from  the  time  they  became 
the  chief  reliance  of  commercial  operations  to  the  present 
period.  The  shocks  on  the  market  have  increased  in  severity, 
in  proportion  to  the  number  and  capital  of  banking  institu- 
tions. This  is  the  first  instance  of  the  entire  suspension  of 
specie  payments  from  this  cause.  Eight  hundred  banks  have 
effected  what  a  less  number  had  failed  to  accomplish,  although 
in  1825  less  than  half  as  many  almost  consummated  a  similar 
result. 

Your  extensive  observation,  Sir,  will  approve  these  re- 
marks. They  embrace  a  simple  detail  of  a  series  of  causes 
and  effects  in  the  commercial  world,  which  you  have  again  and 
again  witnessed.  But  the  system  needs  correction  only,  not 
annihilation.  "  The  perversion  of  the  best  things  converts 
them  to  the  worst."  We  should  not  discard  a  powerful  agent, 
merely  because  its  energies  may  be  so  employed  as  to  pro- 
duce destruction.  The  world  would  be  unwise  to  dispense, 
for  that  reason,  with  the  use  of  steam  or  fire.  Banks  would 
become  as  harmless  as  they  are  powerful,  under  proper 
regulations.  We  want  a  medium,  through  which  the  money 
of  the  capitalist  may  pass  into  the  hands  of  the  man  of 
business,  to  stimulate  and  reward  the  industry  of  the  nation. 
In  our  extensive  country,  we  eminently  need  those  facilities 
of  exchange  which  shall  render  money,  in  the  most  remote 
districts,  of  equal  value  ;  and  which  shall  enable  purchasers 
in  one  part  of  the  United  States,  to  remit  to  distant  sellers  in 
another,  any  sums,  large  or  small,  without  the  transportation 
of  specie.  That  neither  the  government  nor  people  may 
suffer  injustice,  the  payment  or  receipt  of  a  hundred  dollars 
by  the  national  treasury  in  the  city  of  New-Orleans,  must  be 


11 


equal  to  the  same  in  the  city  of  New- York.  The  government 
must  be  enabled,  without  diverting  the  currency  from  its 
channels  of  circulation,  and  without  loss,  to  disburse  in  one 
part  of  the  country  the  revenue  collected  in  another.  These 
several  objects  cannot  be  effected  but  by  a  well  regulated 
banking  system.  Such  a  system,  therefore,  is  essential  to 
the  prosperity,  and  important  to  preserve  the  union,  of  these 
States.  If  it  can  be  so  constructed  and  regulated  as  to 
accomplish  these  objects,  and  at  the  same  time,  be  made 
incapable  of  disturbing  the  trade  or  currency,  its  utility  will 
be  universally  admitted.  That  these  desirable  ends  may  be 
effected,  1  will  endeavour  to  show  in  a  future  communication  ; 
but,  in  my  next  letter,  will  consider  the  question,  whether 
any  adequate  power  for  this  purpose  is  conferred  on  Congress 
by  the  Constitution  of  the  United  States. 

FRANKLIN. 

August,  1837. 


LETTER    II. 

To  the  Han.  Levi  Wbodbury,  Secretary  of  the  Treasury  of  the 
United  States.      . 

SIR  : — In  my  last  letter  I  endeavoured  to  show,  that  the 
general  suspension  of  business,  and  perfect  destruction  of 
"  commerce  with  foreign  nations  and  arriong  the  several 
states,"  was  caused  by  the  excess  of  paper  issued  by  about 
eight  hundred  banking  institutions.  So  long  as  like  causes 
produce  like  effects,  we  may  expect  a  similar  succession  of 
events,  and  a  similar  catastrophe,  whenever  there  is  time  for 
the  maturity  and  explosion  of  another  paper  bubble,  unless  a 
power  is  somewhere  lodged  to  prevent  its  repetition.  It  is  the 
interest  and  duty  of  every  citizen,  and  especially  of  those  in- 
trusted with  public  authority,  to  consider  whether  such  a 
power  exists,  and,  if  it  does,  in  what  manner  it  may  be  exerted 


12 

and  applied,  and  to  you,  sir,  the  financial  counsellor  of  the 
national  government,  the  subject  addresses  itself  with  solemn 
emphasis.  Although  the  states  have  power  over  their  respec- 
tive banks,  yet  the  authority  of  each  is  confined  to  those 
within  its  own  territory,  and  no  one  can  control  those  of  other 
states.  All  attempts,  therefore,  by  the  states  severally,  to 
regulate  the  national  currency,  would  be  limited  and  abor- 
tive, even  if  they  should  make  any ;  which  is  utterly  hope- 
less and  chimerical.  But  I  shall  endeavour  to  show,  that  this 
power  resides  in  the  Congress  of  the  United  States,  to  whom 
the  duty  is  explicitly  intrusted  by  the  constitution/ 

Although  the  provisions  of  the  constitution  which  bear  on 
the  subject  are  very  familiar,  yet  I  will  cite  them,  that  I  may 
more  clearly  assign  the  reasons  on  which  my  opinion  is  ground- 
ed. In  enumerating  the  powers  of  Congress,  in  the  third 
clause  of  the  8th  section  of  the  first  article,  are  these  words — 
"  To  regulate  commerce  with  foreign  nations,  and  among  the 
"  several  states,  and  with  the  Indian  tribes."  In  this  section, 
the  powers  of  Congress  are  enumerated,  not  defined  ;  but  the 
language  is  so  plain  and  explicit,  that  no  exposition  or  com- 
mentary was  necessary  for  its  clear  apprehension.  It  is  often 
contended,  that  no  implied  powers  are  conferred;  that  we 
should  reject  all  constructive  authority ;  and  consider  that 
which  is  not  expressly  given,  as  denied.  This  is  considered  as 
being  the  object  of  the  tenth  article  of  the  amendments,  which 
is  in  these  words  : — "  The  powers  not  delegated  to  the  United 
"  States  by  the  constitution,  nor  prohibited  by  it  to  the  States, 
"  are  reserved  to  the  States  respectively,  or  to  the  people." 
Without  this  amendment,  it  would  seem  too  clear  for  contro- 
versy, that  powers  not  delegated  are  reserved.  We  have 
still  to  go  back,  unfurnished  with  any  new  rule  of  construction, 
to  ascertain,  by  the  language  of  the  constitution  itself,  what 
powers  are,  or  are  not,  delegated.  But  for  the  purposes  of  the 
present  question,  I  will  assume,  that  Congress  have  no  con- 
structive powers,  but  are  confined  to  such  only  as  are  expressly 


13 

given.  No  one,  however,  who  contends  for  this  rule  of  con- 
struction, will  say,  that  no  power  to  regulate  commerce  is 
conferred  at  all.  because  no  act,  to  be  done  by  Congress,  in 
regulating  commerce,  is  particularly  named  or  described.  It 
will  be  admitted,  that  in  regulating  commerce  Congress  must 
do  something.  How,  then,  as  the  power  is  conferred  in  gene- 
ral terms,  and  no  act  specified  in  the  constitution,  are  we  to 
determine  what  they  may  DO  ?  Either  they  have  no  power 
given  by  the  clause  at  all,  or  else  they  have  power  to  do  any 
act  which  is  necessary  or  proper  for  regulating  commerce. 
The  wise  men  who  made  the  constitution,  seem  to  have  pre- 
sumed so  much  on  the  folly  of  those  who  should  come  after 
them,  as  to  foresee  the  strange  doubt,  whether  the  conferment 
of  an  authority  bestowed  the  power  of  exercising  it.  In  order 
to  dissipate  that  doubt,  they  expressly  provided,  in  the  17th 
clause  of  the  same  section,  that  the  Congress  should  have 
power — "  to  make  all  laws  which  shall  be  necessary  OR  proper, 
"  for  carrying  into  execution  the  foregoing  powers,  and  all 
"  other  powers  vested  by  this  constitution,  in  the  government 
"  of  the  United  States,  or  in  any  department  or  officer  thereof.'* 
So  that,  in  this  case,  we  are  brought,  by  the  reason  of  the 
thing,  and  by  the  provisions  of  this  17th  clause,  to  the 
conclusion,  that  Congress  "  may  make  ALL  LAWS  necessary  or 
"proper"  "to  regulate  commerce  with  foreign  nations  and  among 
"  the  several  States."  This  power  is  conferred;  and  that  ex- 
pressly, not  by  implication. 

By  what  power  has  the  commerce  of  this  country  with 
foreign  nations,  and  among  the  several  States,  been  hitherto 
regulated  ?  The  answer  is,  not  by  Congress,  on  whom  the 
power  is  conferred,  but  by  the  several  States,  through  the 
medium  of  banking  institutions.  The  word  "  commerce" 
comprehends  "  every  species  of  commercial  intercourse,"  as 
used  in  this  clause  of  the  constitution  ;  (9  Wheat.  Rep.  193,) 
and  the  power  conferred  extends,  therefore,  to  every  part. 
But  the  regulation  of  the  currency,  more  than  any  other  thing, 


14 

controls  commercial  operations.  It  is  the  instrument  of  all 
exchanges.  If  the  banks  are  liberal  in  their  discounts  and 
emissions,  trade  is  brisk ;  if  they  withhold  their  favours,  it 
languishes.  By  creating  an  excess  they  raise  the  prices  of 
labour  and  of  all  commodities,  and  occasion  extensive  impor- 
tations ;  they  withdraw  their  paper,  and  prices  fall,  and 
importations  cease.  Indeed,  the  national  government  itself  is 
the  victim  of  state  banks.  The  several  States  have  usurped 
the  power  of  regulating  the  currency,  and  have  laid  Congress 
in  the  dust.  They  have  not  only  wrested  from  them  the  regu- 
lation of  commerce  with  foreign  nations  and  among  the  seve- 
ral States,  but  many  other  important  prerogatives.  How  can 
"  Congress  borrow  money  on  the  credit  of  the  United  States," 
if  they  have  no  credit,  and  the  money  is  withdrawn  from  cir- 
culation ?  How  can  they  "  regulate  the  value  thereof,"  if  an 
alloy  of  convertible  paper  is  infused,  by  a  power  over  which 
they  have  no  control  ?  How  can  they  "lay  and  collect  taxes, 
"  duties,  imposts,  and  excises,  or  pay  the  debts  and  provide 
"  for  the  common  defence  and  general  welfare  of  the  United 
"  States,"  if  the  people  have  not  the  means,  except  in  the  paper 
of  broken  banks,  of  answering  the  demands  of  the  government? 
How  are  they  to  see  that  "  all  duties,  imposts,  and  excises 
shall  be  uniform  throughout  the  United  States,"  when  the 
duties  paid  in  Boston  are  in  an  inconvertible  paper,  worth 
double  that  which  is  received  at  New-Orleans  ?  How  are 
they  "  to  declare  war,"  "  raise  and  support  armies,"  "  pro- 
vide and  maintain  a  navy  ?"  Have  not  those  who  have 
deprived  them  of  the  purse,  bereft  them  of  the  sword  also  ? 
Indeed,  if  Congress  discard  the  power  of  regulating  the  cur- 
rency, they  violate  their  oaths.  They  no  longer  "  support  the 
constitution  of  the  United  States."  The  constitution  is  as  pal- 
pably violated  by  expunging  the  powers  it  delegates,  as  by 
exercising  those  which  are  not  conferred.  If  Congress  deny 
the  right,  and  decline  the  duty,  of  regulating  the  currency,  not 
only  will  commerce  and  all  national  industry  be  prostrated, 


15 

but  the  government  will  become  an  empty  name ;  and  our 
union,  independence,  and  liberties  will  all  be  put  at  hazard. 
If  any  one  act  can  be  done,  and  ought  to  be  done,  by  virtue 
of  the  power  to  regulate  commerce,  that  act  is  the  regulation 
of  the  currency.  If  any  "laws  be  necessary  and  proper  for 
carrying  into  execution"  all  the  powers  above  enumerated, 
they  are  laws  for  the  regulation  of  the  currency.  Consequently, 
if  any  power  is  expressly  and  clearly  conferred  by  the  consti- 
tution on  the  Congress  of  the  United  States,  it  is  the  power  of 
regulating  the  currency. 

But  the  restoration  of  our  currency  to  a  sound  State,  ought 
to  be  effected  with  as  little  injury  as  possible  to  existing  mo- 
neyed institutions.  Although  they  have  been  the  sole  origin 
of  all  the  calamities  which  have  been  described,  yet  our  suffer- 
ings are  not  the  result  of  any  conspiracy,  or  malignant  inten- 
tions. Banks  were  carried  along  upon  the  tide  of  business, 
utterly  unconscious  of  the  fatal  termination  of  their  career. 
They  were  violating  laws  of  trade,  as  irreversible  as  the  laws 
of  Heaven,  but  they  knew  it  not.  For  this  they  are  not  to 
blame ;  for  even  you,  sir,  and  others  in  the  most  distinguished 
stations  in  the  national  councils,  were  equally  inapprehensive 
of  the  fatal  precipice  :  or  the  public  treasures  would  not  have 
been  committed  to  the  deposite  banks.  Where  the  actors  are 
involved  in  the  losses  which  themselves  occasion,  it  is  the 
highest  proof  of  innocence.  The  little  fortunes,  too,  of  widows, 
orphans,  and  innumerable  others,  who  do  not  presume  to  inter- 
fere in  the  management  of  banks,  are  invested  in  their  stocks, 
and  must  partake  of  their  destinies.  A  just  system  of  redress 
will  be  pro  motive  of  the  good  of  all.  The  banks  need  to  be 
brought  under  national  regulation,  to  save  them  from  self  ruin. 
They  and  the  public  must  partake  alike  of  common  prosperity 
or  adversity.  They  ultimately  gain  no  good  by  an  unsound 
or  unstable  currency. 

Having  endeavoured  to  show,  and,  as  I  trust,  successfully, 
the  causes  of  the  present  prostration  of  business,  and  of  the 


16 


extensive  bankruptcies  which  pervade  the  country,  and  that 
the  national  government  have  power  to  provide  relief;  I  will, 
in  my  next  letter,  suggest  such  remedies  as  the  interests  of 
our  domestic  and  foreign  commerce  seem  to  me  to  require. 

FRANKLIN. 

Augusl,  1837. 


LETTER   III. 

To  the  Hon.  Levi  Wbodbury,  Secretary  of  the  Treasury  of  the 
United  States. 

SIR  : — I  have  attributed  the  present  derangement  of  the  bu- 
siness and  currency  of  the  country  to  our  banking  institutions. 
As  I  now  propose  to  recommend  a  national  bank,  it  is  incum- 
bent on  me  to  show  why  another  such  establishment  will  not 
augment,  rather  than  correct,  the  evils  which  it  is  intended  to 
remedy.  For  this  purpose,  I  ask  your  attention  to  the  parti- 
cular manner  in  which  banks  have  produced  this  derangement. 

As  already  explained,  the  whole  has  been  owing  to  a  re- 
dundant currency,  occasioned  by  the  excessive  creation  of  pa- 
per money.  The  mixture  of  paper  with  metallic  money  will 
produce  no  such  consequences,  if  the  whole  mass  is  not  there- 
by increased  in  amount.  If  the  laws  of  trade  allot  to  the  Uni- 
ted States  one  hundred  millions  of  dollars,  the  withdrawment 
of  one  half  that  amount  into  the  vaults  of  a  bank,  and  the 
emission,  instead  thereof,  of  fifty  millions  of  paper  money,  by 
which  this  specie  may  be  withdrawn  at  the  pleasure  of  the 
holder,  would  not  increase  the  amount  of  the  circulating  me- 
dium, and  would  not,  consequently,  cause  the  exportation  of 
specie,  or  any  of  the  other  evils  which  we  have  experienced 
from  banks.  Thus  the  paper  issued  by  the  old  Bank  of  Am- 
sterdam, never  increased  the  amount  of  money  in  the  Dutch 
provinces,  or  caused  any  exportation,  speculation,  or  embar- 
rassment. It  was  only  a  bank  of  deposits,  and  its  paper 
issues  were  merely  in  exchange  for  so  much  specie  deposited. 


17 

That  paper  never  depreciated  ;  but  while  in  circulation,  for 
reasons  which  need  not  be  here  stated,  it  bore  a  small  agio, 
or  premium,  when  exchanged  for  specie.  But  our  banks 
created  a  redundant  currency.  Their  power  to  do  this  is  the 
precise  point  in  which  they  need  correction.  Take  from 
them  that  power,  and  they  are  harmless  as  well  as  useful. 
Prescribe  to  them  such  a  course,  that  all  their  paper  in  circu- 
lation shall  be  represented  by  an  equal  amount  of  specie  in 
their  possession,  and  the  remedy  is  perfected. 

This  object  will  be  accomplished  by  the  simple  require- 
ment, that  they  shall  discount  no  paper  on  a  longer  credit 
than  sixty  or  ninety  days,  and  shall  require  punctual  pay- 
ment, without  renewal,  at  the  time  it  falls  due.  If  the  issues 
on  these  discounts  average  at  one  thousand  dollars  a  day,  the 
income  on  the  paper  discounted,  after  a  bank  has  been  ninety 
days  in  operation,  will  also  average  at  the  same  rate.  So  far 
as  these  payments  are  made  in  the  bills  of  the  bank,  those  bills 
are  redeemed  ;  and  so  far  as  they  are  not,  specie  or  its  equi- 
valent will  be  taken  in  their  stead.  Such  a  portion  of  the 
bills  as  remains  in  circulation,  will  be  represented  by  specie 
thus  received,  which  will  always  equal  the  amount  of  those 
bills,  and  lie  ready  for  their  redemption,  if  a  suitable  limita- 
tion is  imposed  on  the  amount  of  discounts.  As  the  receipts 
and  emissions  are  necessarily  equal,  no  addition  will  be  made 
to  the  amount  of  circulating  medium ;  for  just  so  fast  as  the 
bank  pours  currency  into  the  country,  the  country  pours  an 
equal  stream  back  again  into  the  bank  ;  after  this  system  of 
operation  has  become  established,  no  part  of  the  capital  need 
be  retained  for  the  purpose  of  redeeming  the  paper  of  the  bank ; 
but  the  whole  may  be  invested  in  permanent  loans  on  safe 
security,  and  be  made  productive  to  the  institution. 

But  if  payment  of  discounted  paper  is  not  required  at  ma- 
turity, and  the  credit  is  enlarged  by  renewals,  the  circulation 
of  the  bank  will  continually  increase  ;  for  no  returns  will  be 
made  to  counterbalance  the  emissions.  The  bills  issued  will 

3 


18 

not  be  represented  by  the  specie  in  the  bank,  but  by  the  pa- 
per of  its  debtors.  The  general  prevalence  of  this  practice 
has  caused  the  redundancy  of  the  circulating  medium,  and 
all  the  fatal  consequences  which  we  have  seen  it  produce. 

A  national  bank  should  be  so  constituted,  as  not  only  to  be 
incapable  of  these  abuses,  but  be  obliged,  by  the  rules  of  its 
organization,  to  counteract  them  in  other  institutions.  The 
stagnation  of  all  business,  the  extinction  of  the  currency,  the 
loss  of  control  over  the  revenue,  and  the  general  bankruptcy, 
poverty,  and  distress  which  now  prevail,  have  all  been 
achieved  by  long  credits  and  renewals.  Although  a  bank  of 
the  United  States,  constituted  in  the  usual  form,  may  execute 
exchanges,  collect  and  disburse  the  public  revenues,  and  ren- 
der many  other  services  of  great  national  importance  ;  yet  it  is 
exposed  to  the  same  temptations  as  other  banks,  to  grant  ac- 
commodations on  protracted  credit,  and  sustain  an  excessive 
circulation.  It  should  therefore  be  a  cardinal  object  to  impose 
the  most  effectual  restraints  on  its  giving  long  credits  or  re- 
newing notes.  Had  all  banks  been  under  this  restriction, 
they  could  never  have  overthrown  the  credit  of  the  country. 

The  credit  of  a  national  bank  should  be  established  on  a 
basis  as  firm  as  the  foundations  of  the  government  itself.  It 
should  not  only  be  unquestionable,  but  should  be  universally 
known  to  be  so,  at  home  and  abroad.  Its  credit  is  identified 
with  the  honour  of  the  nation,  and  should  be  secured  with 
equal  care.  Such  should  be  its  constitution  that  no  adver- 
sities, while  our  government  exists,  can  impair  the  public 
confidence  in  its  engagements. 

Permit  me,  sir,  with  great  respect,  to  suggest  the  plan  of  a 
national  bank,  which  I  think  would  attain  the  ends  of  such  an 
institution. 

Sixty  millions  would  be  a  competent  capital.  This  should 
all  be  ultimately  invested  in  bonds,  secured  by  mortgages  on 
real  estate,  of  at  least  double  the  value  of  the  sums  secured. 
The  rate  of  interest  should  be  very  moderate,  not  exceeding 


19 

five  per  cent.  All  these  bonds  and  mortgages  should  be  made 
over  to  the  United  States,  to  secure,  from  them,  a  guaranty  of 
thirty  millions,  to  which  sum  the  circulation  of  the  bank  should 
be  limited.  This  guaranty  should  consist  of  national  stock, 
bearing  an  interest  of  six  per  cent.  A  national  office  should 
be  established  near  the  principal  banking  house,  in  which  the 
securities  made  over  to  the  United  States,  and  the  stock 
created  as  a  guaranty,  should  be  deposited.  This  office 
should  be  kept  by  a  commissioner,  appointed  by  the  govern- 
ment, who  should  have  power  to  reject  any  security  which  he 
should  deem  inadequate.  Although  the  national  stock  pur- 
ports to  carry  an  interest  of  six  per  cent.,  yet  none  is  to  be  paid 
while  it  is  in  the  hands  of  the  commissioner.  It  can  never 
be  assigned,  except  under  the  order  of  a  court  of  justice  ;  and 
after  such  assignment  its  interest  will  begin  to  accrue.  The 
bank  is  to  be  strictly  prohibited  discounting  any  paper  which 
will  not  attain  maturity  in  ninety  days  ;  and  although  it  may 
take  additional  securities,  yet  all  agreements,  by  renewal  notes 
or  otherwise,  to  extend  the  original  credit,  should  be  declared 
void.  Whenever  a  bond  and  mortgage  is  paid,  the  money 
should  go  into  the  hands  of  the  commissioner,  to  be  held  as 
security  for  the  United  States,  until  it  shall  be  lent  on  another 
bond  and  mortgage,  to  be  by  him  approved.  The  paper  of 
local  banks,  which  may  be  received  by  the  bank  of  the  United 
States,  may  be  exchanged  for  specie,  or  returned  for  pay- 
ment, to  the  bank  by  whom  it  was  issued,  but  not  used  for 
any  other  purpose.  All  collections,  exchanges,  and  disburs- 
ments  for  the  United  States,  should  be  made  gratuitously. 
The  bank  should  at  all  times  pay  the  bills  it  issues  as  a  cur- 
rency, in  specie,  on  demand,  at  its  principal  banking  house, 
which  should  be  established  in  the  city  of  New- York,  the  great 
emporium  of  our  national  commerce.  On  violation  of  any 
of  the  provisions  of  its  charter,  the  Attorney  General  of  the 
United  States  should  have  power  to  file  an  information  be- 
fore the  Circuit  Court,  who  should  have  original  jurisdiction 


20 

of  the  subject.  If  for  forfeiture  of  the  charter,  or  any  other 
cause,  money  is  to  be  appropriated  to  the  creditors  of  the  bank, 
its  other  assets  should  be  exhausted  before  any  disposition  is 
made  of  the  national  stock  created  as  a  guaranty. 

This  would  constitute  the  outline  of  the  charter.  As  the 
circulation  of  the  bank  is  only  thirty  millions  and  its  pledged 
capital  sixty,  a  resort  to  the  national  stock  for  the  payment 
of  the  debts  of  the  bank,  would  not,  in  any  probability,  ever 
be  necessary ;  and,  as  it  bears  no  interest  until  appropriated, 
it  would  require  no  advances  from  the  public  treasury.  Still, 
as  this  pledge  would  give  the  banks  such  a  credit  in  the  view 
of  all  foreign  nations,  as  well  as  at  home,  as  nothing  else 
could. confer,  it  would  be  of  great  practical  importance  to  the 
institution. 

As  the  bills  issued  by  the  bank,  at  the  commencement  of  its 
operations,  may  return  before  the  maturity  of  discounted 
paper,  so  much  capital  must  be  reserved  in  specie  as  will 
redeem  them.  For  this  reason,  the  investments  in  real  estate 
must  be  gradually  made.  As  soon  as  the  receipts  on  dis- 
counted paper  commence,  provision  to  redeem  the  bills  will 
begin  to  be  furnished  from  that  source,  and  all  those  suspend- 
ed in  circulation  will  soon  be  represented  by  specie  and  bul- 
lion in  possession  of  the  bank.  After  that,  a  prudent  manage- 
ment of  the  affairs  of  the  institution  will  require  no  capital  for 
any  banking  operation  ;  and  any  future  use  of  it,  to  sustain 
the  circulation,  should  be  strictly  prohibited,  that  the  currency 
of  the  country  may  be  wholly  subservient  to  the  laws  of  trade, 
and  not  controlled  by  an  artificial  power.  So  long  as  the  bank 
is  confined  to  the  resources  which  its  own  discounts  may  sup- 
ply, without  the  aid  of  its  capital  to  redeem  its  bills,  it  will 
stand  "  bound  to  it?  good  behaviour."  Its  debtors  will  be 
made  punctual — the  paper  of  other  banks  be  converted  into 
specie — and  the  guards  against  a  redundant  currency  will  be 
strengthened.  This  is  no  new  expedient.  Neither  the  bank 
of  England,  nor  any  other  incorporated  bank  in  Europe,  em- 


21 

ploys  its  capital  in  making  discounts,  or  in  any  of  its  ordinary 
business.  That  of  England  is  invested  in  government  stock. 
If  the  bank  is  required  to  make  its  bills  redeemable  at  the 
city  of  New- York,  they  will  generally  be  above  par  in  other 
parts  of  the  United  States,  from  the  well  known  course  of 
exchange.  A  thousand  dollars  paid  into  the  branch  in  New- 
Hampshire,  will  purchase  a  draft  which  may  be  remitted  to 
New-Orleans  with  little  cost  or  hazard,  and  will  there,  gene- 
rally, command  a  premium  in  specie,  if  made  payable  in 
New- York,  and  will  be  equal  to  specie  if  payable  at  the  New- 
Orleans  branch  in  the  bills  of  the  bank.  Should  this  draft 
be  purchased  with  the  bills  of  a  specie  paying  bank  in  New 
Hampshire,  the  paper  of  that  bank  may  thus  be  applied  to 
pay  a  debt  in  any  part  of  the  United  States.  The  same  paper 
will  then  be  returned  to  the  local  bank  and  converted  into 
specie.  This  must  be  done ;  for  any  other  use  of  it  is  to  be 
forbidden.  Thus,  the  effects  of  making  a  remittance,  by  a 
draft  of  the  national  bank,  are,  first-,  the  accommodation  of 
the  purchaser  of  the  draft,  and  his  distant  correspondent,  by 
furnishing  a  cheap  and  safe  exchange;  secondly,  giving  an 
additional  value  to  the  local  paper,  beyond  what  even  specie 
itself  would  ha\  e  had,  without  the  aid  of  a  national  bank : 
thirdly,  compelling  the  local  bank  to  take  in  so  much  of  its 
paper,  and  thereby  check  its  extravagance :  fourthly,  com- 
pelling the  same  bank  to  stand  in  readiness  to  make  redemp- 
tions, by  retaining  a  competent  supply  of  the  precious  metals, 
and  thereby  reducing,  to  that  extent,  the  ampunt  of  currency 
in  circulation  :  fifthly,  supplying  the  bank  of  the  United  States 
with  specie  to  fulfil  its  obligations.  All  payments  of  local 
bills  into  the  bank,  in  any  part  of  the  country,  must  have  a 
like  salutary  influence  on  the  currency  and  the  respective 
institutions.  But  it  is  unnecessary,  sir,  to  go  into  detail,  to 
show  how  such  a  national  bank  would  meet  every  want  of 
the  government  and  people,  equalize  the  value  of  money 
every  where,  restrain  excess  in  the  issue  of  paper,  and 


22 

thereby  prevent  the  exportation  of  specie,  and  secure  a  sound 
metallic  currency ;  while  disabled  from  affording  those  long 
indulgences  which  are  the  basis  of  speculation  and  extra- 
vagance ;  and  compelled,  by  its  own  necessities,  to  impose 
a  like  disability  on  all  subordinate  institutions. 

It  is  common  for  banks  to  make  an  acknowledgment  for 
their  charters,  by  paying  a  sum  of  money  to  the  public  trea- 
sury. But  this  bank  would  pay  its  bonus  directly  to  the  peo- 
ple. If  its  capital,  sixty  millions,  is  let  out  on  mortgage  at 
the  low  interest  of  five  per  cent.,  it  confers  an  annual  value  of 
one  per  cent,  upon  the  loan,  on  every  piece  of  real  estate  in 
which  it  is  invested.  If  the  use  of  money  is  worth  six  per 
cent.,  and  a  farm  is  encumbered  with  a  loan  at  five,  the  pur- 
chaser, if  he  can  be  indulged  on  the  same  terms,  acquires  a 
credit  at  a  reduced  price,  and  can  afford  to  add  a  proportional 
consideration  for  the  property.  These  mortgages  will  facili- 
tate the  transfer  of  real  estate,  by  lessening  the  sum  to  be 
paid  in  advance.  The  owner  has  the  same  products  from  its 
occupancy  as  if  it  were  not  under  mortgage,  while  he  is 
enabled  to  enjoy  the  use  of  the  money  at  a  low  interest.  The 
bank,  in  its  loans  in  this  department,  is  accommodated  by  a 
long  credit ;  and  the  tradesman  relieved  from  the  humiliating 
necessity  of  frequent  renewals,  and  changing  his  endorsers. 
Short  accommodations,  on  business  paper,  should  be  opera- 
tions of  discounting ;  and  the  paper  of  the  bank  should  be  em- 
ployed in  them  alone.  Loans  to  those  who  borrow  should  be 
made  only  from  the  capital,  on  securities  of  real  estate. 

The  dividends  of  this  bank,  arising  chiefly  from  its  mort- 
gages and  discounts,  would  be  moderate — probably  seldom 
over  six  per  cent. — but  the  stock  would  be  valuable  from  its 
unquestionable  safety.  The  people  of  every  State  should  be 
equally  favoured  with  the  oppoitunity  of  becoming  stock- 
holders. The  stock  may  be  contributed  by  a  bond  and  mort- 
gage simply,  without  the  payment  of  any  money  ;  unless  it 
might  be  deemed  necessary  to  require  the  advancement  of  a 


23 

proportion,  in  order  to  supply  the  bank  with  a  sufficient  sum 
for  the  commencement  of  its  operations. 

This  bank,  if  established,  would  soon  restore  specie  pay- 
ments, and  inspire  universal  confidence  and  credit.  The 
great  safety  of  its  stock  would  command  a  price  in  Europe, 
which  would  extinguish  the  balance  of  foreign  debt,  prevent 
the  further  exportation  of  specie,  and  secure  its  introduction 
from  abroad.  It  would  stand  between  the  local  banks  and 
the  country,  and  be  an  impassable  barrier  against  another 
inundation  of  paper  money.  Bereft  of  its  capital,  and  for- 
bidden to  extend  credits  on  discounted  notes,  it  could  not 
overcharge  the  channels  of  trade  by  excessive  issues.  Its 
necessities  could  not  affect  its  debtors,  and  compel  them  to 
abandon  enterprise  which  its  own  encouragements  had 
induced,  for  a  certain  day  of  payment,  both  on  discounts  and 
mortgages,  is  fixed,  and  cannot  be  either  shortened  or  extend- 
ed at  the  will  of  the  bank.  Its  operations  would  soon  subject 
all  other  banks  to  the  same  salutary  law.  If  any  future 
changes  and  embarrassments  should  occur  in  the  market,  they 
would  be  attributable  to  the  laws  of  trade,  which  would  then 
govern,  and  not  to  the  banks,  which  would  then  be  subject  to 
those  laws.  The  government  of  the  United  States  would 
not  only  have  provided  an  important  "  regulation  of  com- 
merce with  foreign  nations  among  the  several  States,"  but 
would  be  able  to  perform  those  other  functions  to  which  a 
sound  currency  is  essential. 

To  you,  sir,  I  respectfully  submit  these  views  of  the  con- 
stitutionality and  necessity  of  a  national  bank,  and  of  such  an 
organization  as  would  secure  its  usefulness  and  deny  it  the 
means  of  injury. 

If  any  doubt  of  the  power  of  Congress  to  create  such  a 
bank  could  be  reasonably  indulged,  after  the  construction 
given  the  constitution  at  the  origin  of  the  government,  and 
the  repeated  decisions  of  the  Supreme  Court  of  the  United 
States,  whose  province  it  is  to  decide  all  questions  arising 


24 

under  it ;  our  late  experience  would  settle  the  fact  to  which 
the  constitution  refers  as  the  basis  of  this  power,  more 
clearly  than  in  any  former  period  of  our  history.  That  "  all 
laws  necessary  or  proper"  for  regulating  the  commerce  might 
be  made  by  Congress,  is  the  express  language  of  the  constitu- 
tion. That  a  law  establishing  a  national  bank  is  of  this  de- 
scription, has  of  late  become  peculiarly  manifest;  every 
other  expedient  having  failed.  This  is  our  only  remaining 
hope. 

The  people  of  the  United  States,  bereft  of  employment,  and 
appalled  at  the  gloomy  prospects  of  the  country,  are  looking 
to  Congress,  imploring  that  relief  which  no  other  power  can 
give.  They  pray,  that  not  only  the  fiscal  concerns  of  the 
treasury,  but  the  business  and  commerce  of  the  whole  nation, 
may  be  restored  to  order  ;  that  the  people,  as  well  as  the 
government,  may  participate  in  a  sound  currency,  and  be 
enabled  to  discharge  the  duties  which  they  reciprocally  owe. 
They  wish  means  to  be  applied  which  are  safe,  plain,  and 
practical — which  present  no  new  experiment,  but  are  built 
on  well  known  principles,  embracing  the  guards  and  securi- 
ties which  experience  commands — that  the  enjoyment  of 
the  ample  resources  of  the  country,  may  renew  their  enter- 
prise and  revive  their  hopes  ;  and  they  confidently  trust  that 
in  this  period  of  universal  prostration  and  suffering,  the  inte- 
rests and  wants  of  the  country  will  exclude  all  party  influence 
from  our  public  councils.  FRANKLIN. 

Avgnft,  1837. 


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